Napster users sharing passwords to save cash

Once again, Napster has raised its revenue expectations, with the company's fourth quarter forecast rising from $14-15m to the most recent prediction of $16.5-17.5m. Napster has gained 143,000 new subscribers, making a grand total of 410,000. And nearly a third of Napster's US subscribers (56,000) are at universities - which means that the company's strategy of marketing towards colleges is succeeding, even if those subscriptions may be heavily subsidised.

Some may take this as a sign that students have given up their frugal fondness for filesharing in exchange for a licensed, legitimate lifestyle. But a tip-off we received recently suggests otherwise.

One of our contacts revealed to us that she and some of her student pals share a single Napster account to reduce the cost of subscribing. Apparently it's a relatively common practice, at least among these London youngsters, for one person to pay for the £9.95 per month Napster account and then to distribute the username and password among several others - in exchange for favours and drinks. Our contact couldn't remember exactly how many people she'd given the details to, but stated that she knew for certain at least two other people who used her account on a regular basis.

Over the past couple of days MusicAlly has run several tests, during which we were able to download and stream simultaneously from four separate computers across two separate Internet connections for good stretches of time. Our findings so far suggest this situation is the same whether we use a trial account, a paid-for credit card account or the £14.95 Napster To Go service. By comparison, several other Internet subscription services, including Real's Rhapsody, log the first user out automatically if a second user logs in using the same username and password.

Arguably the fact that one of the subsequent users could order one of Napster's paid-for permanent downloads, thus adding a charge to the original user's card, provides a small disincentive against sharing usernames and passwords. But Napster requires users to insert their credit card security number before making a major purchase, such as the upgrade from the £9.95 service to Napster To Go. What's more, the credit card numbers themselves are not exposed on the accounts page, so there's no danger of having your card details ripped off by someone with whom you're sharing the music service.

P2P = password to partner?

A statement from Napster states that "you cannot maintain two accounts simultaneously - if you log into the same account on another machine, the previous user will be logged out within five minutes". However, while it is true that during our tests a user would occasionally be logged out, this did not occur every five minutes, nor when any of the computers were simultaneously downloading or playing streams, which continued uninterrupted. And Napster's 'Sign Me in Automatically' feature means that even if logged out, re-connecting to the service is quick and not at all inconvenient.

"Our licence agreements allow people to access the service via a single account on three PCs," continues Napster's statement, "but we certainly do not allow users to share/log onto an account simultaneously." Unfortunately, the experience of our tests does not tally with Napster's claim - and we have the earache from listening to music coming from three sets of computer speakers simultaneously to prove it.

Contacts of ours have emphasised that they are indeed sharing the same account in order to avoid paying. And they have been doing this for some time. Even if it is not a widespread phenomenon, the practice of password sharing must be detrimental to Napster's business and may well be detrimental to the business of certain rightsholders.